Social-Networking Site Gives Retailer a Start Startup Journal
Like many college students, Stephanie Madesh enjoys socializing online with friends through networking site MySpace.com. So when she began planning to create a Web-based apparel company this past spring, she thought MySpace would be an ideal place to court her target demographic -- young women like herself. Ms. Madesh created a profile for her start-up, Kalon Clothing (www.kalonclothing.com and groups.myspace.com/kalon), on MySpace a month before her Web site went live to create some buzz about the company. Since then her business's profile has drawn more than 850 MySpace members. The company also has posted about $1,000 in sales since May, netting the college senior a profit of about half that amount, she says. For start-ups on a shoe-string budget, the opportunity to gain widespread exposure at no cost may seem too good to be true. But networking sites like MySpace, purchased by News Corp. last year, allow groups -- including businesses -- to create online communities for free. As a result, new ventures eager to establish an initial customer base can benefit by creating a network on MySpace and inviting "friends." A group page on MySpace usually includes a photo and description of what the group or business is about, as well as additional pictures or artwork, video, audio and links to Web sites, such as a company home page. Groups also can post news bulletins and launch user discussions. To get members to join, a group must make or receive membership requests. A group's members are listed on its page and vice versa. Most of Kalon Clothing's more than 850 MySpace members were brought in by Ms. Madesh and her business partner sending invites to individuals one by one. "We had time and no money, so we were willing to do it," says Ms. Madesh, 21 years old. They invited MySpace users who were already members of other retail and fashion groups to join Kalon's group. They held a drawing for a $25 gift certificate to Victoria's Secret to entice users to accept their invitation. Participants had to complete an online survey about their impressions of products that Kalon was considering selling. "We got 300 respondents in two weeks," says Ms. Madesh. Soon after, the company set up a fashion panel inviting people to complete weekly online surveys in return for store discounts or gift certificates. Ms. Madesh says about 40 people joined the panel after seeing ads for it on MySpace and Kalon.com. "We take the feedback pretty seriously," says Ms. Madesh. "Sometimes it's surprising. You think something is God awful and people think it's amazing." Ms. Madesh says she and her partner, a friend and fellow business major at Babson College in Wellesley, Mass., invested their savings to get Kalon Clothing started, spending about $4,500 on initial inventory that included women's tops, bottoms and accessories. A fellow student agreed to design and manage the Kalon.com site for a 5% share of the firm's sales. Ms. Madesh says she did not track where her company's initial sales came from -- shoppers who found it on MySpace or by going straight to Kalon.com -- but plans to do so going forward. The company has not done any other advertising, she says. MySpace users can find Kalon Clothing by doing a search on its name in the site's group section, which is organized by category. The business is listed in "Fashion & Style" among more than 43,000 other groups including big-name retailers like Urban Outfitters, though their profiles in many cases are not maintained by the actual companies. Instead, they may be hosted by members who voluntarily represent their favorite brands. The company gets its merchandise from four apparel manufacturers, two of which provide free photos of models sporting their goods, says Ms. Madesh, which they post on their site. Photos of their other products are taken by photography majors at Babson for free and their friends serve as models, she says. During the fall semester, Ms. Madesh says the company plans to hire an hourly worker to fill and ship orders. The employee will work out of Ms. Madesh's parents' home in Lebanon, Ore., where Kalon's inventory is stored, she says. Ms. Madesh says they wrap orders in colored tissue paper, ribbon and stickers at a cost of less than a quarter apiece. "We do that to make the package a little more unique," she explains. "We feel that every time you buy something from us, it should feel like you're getting a gift." The orders are then shipped in boxes that the post office provides free of charge for priority-mail users, she adds. The company charges customers separately for shipping. Kalon Clothing has room to grow on MySpace, which attracted more than 48 million unique visitors in April and is the eighth most trafficked site on the Internet by unique monthly visitors, according to comScore Networks Inc. For example, a page for fans of retailer Abercrombie & Fitch shows that the trendy clothing company has more than 122,000 "friends." Recently Ms. Madesh created a page for Kalon on Facebook.com, another networking site aimed at college and high school students. Ms. Madesh says she hasn't put much effort into growing Kalon's presence on Facebook because she says its membership is more niche than MySpace's. Last month, Ms. Madesh says she applied for a $10,000 loan from the U.S. Small Business Administration for her business. The money would go toward developing a print catalog, advertising on search engines and additional inventory, she says.
By SARAH E. NEEDLEMAN
Editor's Note: My Best Marketing Idea is a new feature about strategies entrepreneurs have used to promote their businesses. Have a successful marketing strategy you'd like to share? Send an email to sarah.needleman@wsj.com.

Yahoo Results Disappoint; Shares Fall

The Web portal is also stung by an announced delay in its new
system for search advertising. By Chris Gaither.
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Home Sales Fall Again; Prices Rise

Southern California's housing slowdown persisted last month as
prices rose at their slowest pace in more than six years and sales
fell for the seventh month in a row, data showed. By Annette
Haddad.
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Disney Fires Film Production President

Nina Jacobson will be replaced by marketing head Oren Aviv as the
company revamps unit. By Claudia Eller.
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Syrah, at Home On the Coast

BUELLTON, Calif.-Santa Rita Syrah pushes into Pinot territory. By
Corie Brown.
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Movie Execs Charged in Money-Laundering Case

Federal prosecutors say Limelight Films was a front in
international drug smuggling. By Andrew Blankstein and Richard
Winton.
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Cuts in Title Insurance Rates Sought

Homeowners in the state could save an estimated $1 billion a year.
Insurers decry the plan. By Marc Lifsher.
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Bernanke Sees U.S. Economy in Balance

WASHINGTON-The Fed chief cheers markets with a forecast of
sustainable growth and lower inflation. By Joel Havemann.
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Apple Sparkles as Others Disappoint

Its profit jumps 48% while Intel's sinks. Concerns of slowing
growth persist at EBay. By Terril Yue Jones and Dawn C.
Chmielewski.
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Even As Battles Rage, Life is Sweet for ABC Anchor

Charles Gibson is savoring his hard-won position on 'World News.'
By Matea Gold.
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Betting on Clubs

Southern California's revamped Indian casinos are booking big
names and pushing cool nightspots. By Susannah Rosenblatt.
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Editorial: All Bets Are Off(line)

Instead of hassling offshore gambling CEOs at airports, the feds
should legalize online betting.
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As Layoffs Sweep Movie Studios, Hollywood Fears for Its Future

Never mind that movie ticket sales are picking up and that
"Pirates of the Caribbean: Dead Man's Chest" could become the
biggest hit in motion picture history. As studios slash jobs and
restructure to boost profits, Hollywood's creative and executive
ranks are having a collective anxiety attack. By Claudia Eller and
Richard Verrier.
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MySpace Rules the Web ClickZ Stats
NewsCorp-owned MySpace garners the highest U.S. market share of visits on the Web, even beating out Yahoo Mail and portals. That's according to data released by Hitwise. For the week ending July 8, MySpace had 4.46 percent market share of visits, making it the top site on the Internet. The social networking site surpassed widely-used Web-based e-mail and portal sites including Yahoo Mail (4.42 percent); Yahoo (4.25 percent); Google (3.89 percent) and MySpace's own e-mail site (2.85 percent). eBay ranks eighth on the list with 1.59 percent market share. MySpace's growth rate was gradual, but it enjoyed a 4,300 percent increase over a two year period. "This site has increased more than we've seen in my memory of any of the sites we track," said Bill Tancer, general manager of Global Research at Hitwise. "There doesn't seem to be any end in sight. While Tancer said MySpace could maintain the top position; he leaves open the possibility for an incumbent. "We have to realize with the Internet there's always a chance someone can come up with a brand new way of doing things and take over the dominance of MySpace."

Weekly Market Share of Visits Ranking Among All Web Sites (U.S.) For Week Ending July 8, 2006
Rank Name Domain Market Share (%)
1 MySpace www.myspace.com 4.46
2 Yahoo Mail mail.yahoo.com 4.42
3 Yahoo www.yahoo.com 4.25
4 Google www.google.com 3.89
5 MySpace - Mail mail.myspace.com 2.85
6 MSN Hotmail www.hotmail.com 2.39
7 MSN www.msn.com 1.92
8 eBay www.ebay.com 1.59
9 Yahoo Search search.yahoo.com 1.36
10 MSN Search search.msn.com 0.93
Source: Hitwise, 2006

MySpace is the only NewsCorp property to reach the top 10-ranked sites, but other properties in the company's portfolio benefit from the social networking site's success. "This has been a brilliant move for NewsCorp," said Tancer. "What we've seen in relationships to other News Corp. sites is an increase in market share. I think we're going to see a lot of synergies created from all the NewsCorp properties." Among other social networking sites, MySpace remains out of reach in terms of visits. The site maintained a market share in that category of over 75 percent from April to June of this year, topping out in June with 79.97 percent market share. Competing sites like Facebook, Xanga and Yahoo's 360 site each held under 10 percent market share. Bebo's market share was 0.98 percent in June, but it increased its share of visits by 21 percent from the previous month when it held a 0.77 percent market share stake.

Percentage of Monthly Market Share of Visits Among Top Social Networking Web Sites (U.S.), April Through June 2006
Domain June 2006 May 2006 April 2006
www.myspace.com 79.97 77.20 76.07
www.thefacebook.com 7.58 8.73 8.24
www.xanga.com 3.81 4.40 5.29
360.yahoo.com 1.13 1.29 1.38
www.bebo.com 0.98 0.77 0.73
www.tagged.com 0.92 0.97 1.17
www.classmates.com 0.83 1.01 1.30
www.hi5.com 0.78 1.06 1.19
spaces.msn.com 0.75 1.29 1.41
www.sconex.com 0.64 0.70 0.81
www.gaiaonline.com 0.57 0.50 0.50
www.bolt.com 0.52 0.43 0.21
www.friendster.com 0.46 0.53 0.58
www.orkut.com 0.30 0.33 0.30
www.myyearbook.com 0.26 0.25 0.24
www.crushspot.com 0.18 0.18 0.18
www.migente.com 0.16 0.18 0.19
www.tagworld.com 0.13 0.14 0.14
www.faceparty.com 0.02 0.02 0.03
www.xuqa.com 0.02 0.02 0.04
Source: Hitwise, 2006

"We are still discovering the Internet laws of gravity as it relates to a site's potential to grow on the Internet," said Tancer. "The fact that MySpace was virtually unknown by the mainstream Internet users two years ago and now claims the top position demonstrates how hyper-competitive the Internet really is." Hitwise monitors top-level clickstream data for over 25 million Internet users who interact with over 500,000 Web sites across 160 industry categories. Data are collected via a combination of ISP data partnerships and opt-in panels within local and International privacy legislation.
By Enid Burns

Carmaker Ford hit by $123m losses BBC News
Carmaking giant Ford posted a surprise second-quarter loss of $123m (£66.5m) as sales of sport utility vehicles (SUV) fell on higher petrol prices. The firm is shutting 14 plants and cutting up to 30,000 manufacturing jobs in North America by 2012. Ford, which recorded a profit of $946m a year ago, also saw US vehicle sales fall 7% in the second quarter. Earlier this month, it announced it was to cut its shareholder dividend in half, dealing a blow to investors. Then, it announced a 50% cut in its third-quarter dividend to five cents.

'Not getting easier'
Revenue in the second quarter fell $2.5bn from last year to $42bn. In a statement after the quarterly results, chairman Bill Ford said: "We've seen an improvement in North America results in the second quarter, but the external factors we face aren't going to get any easier." Critics say Ford has relied too heavily on sales of SUVs and trucks in recent years, limiting development of other models. The firm's market share has slipped amid fierce competition from more efficient Japanese producers, such as Toyota and Nissan. Ford is embarking on a massive cost-cutting drive to make it more competitive, particularly in its home market.

Google Doubles Its Profit

SAN FRANCISCO-Microsoft's earnings fall but its strong outlook
lifts shares. AMD also posts quarterly gains. By Chris Gaither and
Terril Yue Jones.
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U.S. Charges 2 in Stock Option Case

SAN FRANCISCO-The ex-CEO of tech firm Brocade and a colleague are
criminally accused of backdating grants to make them worth more.
Other cases may follow. By Tom Petruno and Joseph Menn.
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Watch Out! 3-D Is Back; Studios Say It's Improved

Hollywood hopes the format can pull people into theaters. By Dawn
C. Chmielewski.
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Chinese Managers Stir Taiwan

TAIPEI, Taiwan - More mainlanders are moving to the island to
work. Officials fret over Beijing's influence. By Mark Magnier.
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Dell Shares Plunge After Report

Dell Inc. shares tumbled nearly 10% after the world's largest
personal computer maker warned shareholders that second-quarter
profit and revenue would fall well short of Wall Street
expectations because of cutthroat price competition. By Terril Yue
Jones.
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Scrutiny of Options Expected to Grow

The government's first charges in a stock-option backdating
scandal have put corporate America on notice: It's time to 'fess
up, if you haven't already. By James S. Granelli.
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His First Million May Be in the Cards

Jeff Madsen, a UC Santa Barbara student, becomes the youngest
winner of an event in World Series of Poker history. By Scott
Martelle.
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Zune challenge beckons for iPod BBC News
Microsoft has confirmed it is developing a "Zune" portable music player which analysts believe will compete directly with Apple's iPod.The software firm said it was working on a number of music and entertainment hardware devices, the first of which could launch later this year. Rumours of a rival to Apple's hugely successful music player - dubbed "iPod killer" by some - have long circulated. But experts said Microsoft would find it hard to compete with Apple.

'Coveting the market'
The iPod accounts for more than 50% of digital music players sold while iTunes, Apple's digital music store, has a 70% share of its market. Experts say Microsoft has long coveted the market for handheld entertainment devices as the market for its core desktop software products becomes saturated.Microsoft said it was working on products in this area under the brand name Zune but gave no further details. "Under the Zune brand, we will deliver a family of hardware and software products," said Chris Stephenson, the firm's general manager for marketing. "We see a great opportunity to bring together technology and community to allow customers to explore and discover music together." Experts said the success of the product would depend on whether users were able to download music and video wirelessly. "Creating a lifestyle device, Microsoft is clearly going to face a battle here," said Michael Gartenberg, from Jupiter Research. "It is going to be hard for them to create the same level of cachet that Apple has with the iPod."

Latino-Owned Banks Seek to Fill Void in L.A.

Start-ups, including one backed by Oscar De La Hoya, say they will
offer businesses the flexibility and familiarity that major
institutions lack. By E. Scott Reckard.
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Divine Inspiration From the Masses

Open-source programming's organizing principle has been embraced
in medical research, engineering - even religion. By Charles
Piller.
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League of Extraordinary Men

The legendary power hitters of the Negro leagues, overlooked in
their time, are getting recognition from baseball that many think
is long overdue. By Lonnie White.
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The Significance of Others

A study says Americans' personal ties are waning. Or maybe not -
if you count MySpace friends. By Gina Piccalo.
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Gas prices up to record high CNNMoney.com
Gas prices rose nearly two cents over the past two weeks, to a record high of $3.02 per gallon of self-serve regular, a national survey reported Sunday. The survey, carried out July 7 and July 21, tallied prices at about 5,000 gas stations and found that self-serve regular rose 1.98 cents per gallon, to a national average of $3.0150, said Trilby Lundberg, publisher of the "Lundberg Survey." Sunday's uptick bests by a third of a penny the prior record, which was set last Sept. 9 in the wake of Hurricane Katrina, Lundberg said. But, adjusted for inflation, Sunday's price remains 15 cents lower than what it was in March 1981, she added. And, given that demand in recent days has been flat or shrinking, prices are unlikely to continue upward, Lundberg suggested. "The overall gasoline supply is not tight," she said. The trend in gas prices typically follows that of crude, and crude prices for West Texas Intermediate slipped on the NYMEX from more than $77 per barrel on July 14 to $74.43 last week, she said. Absent storms resulting in damage to refineries -- as occurred last year with Hurricanes Katrina and Rita -- or new threats to world oil supplies, prices should drop, she said. Sunday's poll found that drivers in Charleston, S.C., paid the least, at an average of $2.77 per gallon; drivers in San Diego, Calif., paid the most, at $3.28. Here are some other prices:

• Atlanta: $3.00
• Charleston, W. Va.: $2.99
• Houston: $2.93
• Milwaukee: $3.20
• Omaha, Neb.: $2.92
• Salt Lake City: $2.80
• Seattle: $3.02
• Wilmington, Del.: $3.12

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Selling a New Digital Tune

Microsoft, in a business strategy shift, will enter new territory
with the launch of its own music player and service under the Zune
brand. By Dawn C. Chmielewski.
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Will Mexico Soon Be Tapped Out?

MEXICO CITY - Output at Mexico's most important oil field has
fallen steeply this year, raising fears that wells there that
generate 60% of the country's petroleum are in the throes of a
major decline. By Marla Dickerson.
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Putting Universal's Chiefs to the Test

Marc Schmuger and David Linde must prove to the creative folk that
they're not just "suits." By Lorenza Muñoz.
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Reigning and Pouring

HOYLAKE, England - Tiger Woods wins his second consecutive British
Open and 11th major title, then unleashes a torrent of tears for
the father who wasn't there to see it By Chuck Culpepper.
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Today, helmets for all

The helmetization of America has reached even surfing and
bull-riding. This is in addition to headgear already on the market
for bicycling, motorcycle riding, in-line skating, skiing,
baseball and football. But are we safer? Head injury experts worry
that some new helmets have come on the market without empirical
data to show the need for or the effectiveness of the headgear. By
Hugo Martín.
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No sponge left behind

In the leap of faith that is surgery - counting backward from 100
to oblivion, waking to the faces of kindly strangers - one can
only hope everyone in the operating room gets the sponge count
right. It's rare, but it happens: Surgical staff lose track of an
item in a patient. But a new scan could eliminate such gaffes. By
Susan Brink.
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Google gives PayPal a run for your money The Christian Science Monitor
Shoppers browsing online for new designer sunglasses or that ultrathin cellphone have a new temptation: a speedy-looking blue shopping-cart icon offering to whisk them to a purchase. Last month, Google, by far the most popular way to find things on the Internet (it processes about 45 percent of all searches), added Google Checkout to its burgeoning list of related products. By signing up, shoppers can quickly and painlessly (at least until the bill arrives!) click to buy anything where they see the Google Checkout shopping-cart symbol without entering their credit-card number or other information. Consumers can also keep track of what they've bought anywhere online in one place.Google joins PayPal, a more full-service online- payment system owned by eBay, and others such as Bill Me Later, in offering an online "electronic wallet." These companies argue such systems are safer than punching in credit-card numbers all over the Net. Both Google and PayPal act as an intermediary and don't reveal the consumer's full credit-card number to the merchant at the site of the purchase. But others worry that Google, in particular, is beginning to accumulate a tremendous amount of personal and financial data on consumers. With Checkout, "Google has more data on you than before," says Philipp Lenssen, a full-time blogger in Stuttgart, Germany, whose Google Blogoscoped ( blog.outer-court.com) tracks developments at Google. "They have your e-mails [if you use Gmail], they have your search queries, they have what you shop for, they know which results you click on. If you have the Google Toolbar installed, they know where you're surfing." "We take the privacy of our users very, very seriously," says Benjamin Ling, product lead for Google Checkout. For example, buyers using Checkout can set up a special e-mail account to communicate with sellers so that their own e-mail address remains private. "We understand that we're playing a trusted role here," Mr. Ling says. "We seek to protect the privacy of our users while staying in compliance with the law." Google Checkout's privacy policy states that the company "will not sell or rent your personal information to companies or individuals outside Google," but will share information "[t]o detect, prevent, or otherwise address" fraud, security, or technical issues. Earlier this year, Google vigorously opposed in court a request from the US Justice Department to provide it with 1 million random Web addresses and records of one week of Google searches. A judge later ruled that Google must provide 50,000 Web addresses from its databank but would not have to reveal any terms users had searched for. Other than requests from the US government, Google has little reason to disclose the data it's accumulating, Lenssen says. "They don't have any [business] incentive to hand out your credit card [number]," he adds. Although Google is a widely recognized brand name, it still has some work to do to persuade shoppers that it will handle their money with care, says analyst Edward Kountz, who tracks online payments and financial services at JupiterResearch in Boston. "[Google's] very much a search 'brand.' It's not a trusted brand per se." The ultimate question, he says, is "Would you let them hold your wallet?" In the short term, Mr. Kountz says, "The credit-card companies still have the predominant share of the market space [online], and I would say of brand recognition as well, with the exception of PayPal." About three-quarters of those going on the Internet have purchased a product or service online in the past 12 months, according to a JupiterResearch/Ipsos-Insight survey. But among those who have not made a purchase, concerns about security for their credit card or person ranks as the No. 1 reason (37 percent of respondents) for hesitating. That may be why both Google Checkout and PayPal emphasize the security advantages of making purchases through them rather than entering credit-card information at each website. PayPal, online since 1998, has already staked out a large and growing presence. Last year, its total transactions amounted to $27.5 billion, a 45 percent increase over the previous year. Or, put another way, 10 percent of all the online sales in the United States were processed through PayPal, says Amanda Pires, a spokesperson for the company. But although PayPal administers 114 million accounts worldwide, there are still "a lot of people who've never bought anything online," especially outside the US, Ms. Pires says, meaning the market is far from saturated. Currently, Google requires a credit- or debit-account number to buy from participating merchants. At PayPal, consumers can transfer money in and out of bank accounts, too. While PayPal won't comment directly on Google Checkout, PayPal's parent company, the giant online auction site eBay, has said it will not allow Google Checkout to be used for eBay transactions. Google Checkout, with fewer features than PayPal, isn't "going to be a PayPal killer," Kountz says. PayPal is aimed at consumers and auction buyers, while Checkout is aimed at attracting merchants. Google launched Checkout < http://www.google.com/checkout > with a relatively modest number of online stores on board, including Jockey, Starbucks Store, Levi's, Dockers, Buy.com, Timberland, and Zales. Google's Checkout icon appears as an option on the checkout page of participating merchants. But the service may quickly prove attractive to the vast number of online merchants, large and small, who pay to advertise using Google's AdWords program. For them, Google places small ads on behalf of advertisers next to its search results and charges the advertisers based on the number of clicks their ads receive. Google will also make money, as do the credit-card companies, by charging a small fee to merchants for processing online transactions. However, for every dollar a merchant spends on buying AdWords, Checkout will waive the processing fee for $10 worth in sales. That's a symbiotic relationship that could drive more use of both services. In the end, Google simply wants to make money in as many places as it can as it creates more online tools, Lenssen says. "For them, [Checkout] is a very logical next step."
By Gregory M. Lamb | Staff writer of The Christian Science Monitor

New bid to salvage WTO trade deal BBC News
Trading powers are holding talks in Geneva aimed at pushing forward with a deal on global free trade.Ministers from the US, Europe, Brazil, Australia, India and Japan hope to agree a way to boost trade in industrial and agricultural goods. If the negotiations fail, World Trade Organization (WTO) members risk missing an end of year deadline for setting out the details of a trade treaty. The talks will be followed by more discussions later this month. Previous meetings aimed at moving the so-called Doha round of trade talks have been delayed by a key sticking point between developing nations and the US and EU. Developing nations want Europe and US to lower farming subsidies and tariffs, while the Washington and Brussels want greater access to manufactured goods markets.

Deal warning
Negotiators have warned that if the current talks fail to make a breakthrough there may be little need for further discussions on 28 and 29 July. "It is difficult to imagine that we can continue coming here without anything happening," EU Agriculture Commissioner Mariann Fischer Boel told Reuters. The meeting in Geneva is the latest in a long line of "last ditch" attempts to save the trade treaty. Earlier this month, similar talks in Geneva fizzled out without a deal, prompting WTO chief Pascal Lamy to warn the negotiations were "in a crisis". However, at follow up talks in Russia involving leaders of the G8, the leaders of the industrial nations set a target date of mid-August for a breakthrough in the key issues of farm and industrial goods.

Offer rumours
Speculation has also been rife that the US and EU are close to cutting deals to ending the Doha deadlock. Reports suggest the US could slash its farm subsidies, while the EU has already said it is prepared to move closer to the 54% cut in agricultural tariffs demanded by poorer nations. Timing is crucial to the negotiations - which are already long over their original 2004 deadline - with a deal needed by the end of the year. If no agreement is reached by 2007, the special authority US President George Bush has to negotiate trade deals will expire. After that it will be harder for him to get congressional approval, and if the US cannot deliver on whatever its negotiators might agree, other countries will not want to either.

Europe blames US for WTO failure BBC News
EU Trade Commissioner Peter Mandelson has blamed the US for the collapse of the latest round of global trade talks. US conditions attached to cutting farming subsidies were "unacceptable" for developing countries, he said. But the US said it was "fully committed" to the talks and blamed Europe for its lack of ambition over reaching a deal to cut farming tariffs. After assessing the situation, the World Trade Organization (WTO) decided no more talks should be attempted. "We will certainly not conclude the round this year," WTO director general Pascal Lamy said. That could mean even further delays to the so-called Doha round of talks which began in 2004.

'Missed opportunity'
Negotiators had been hoping for a deal this year before the special authority US President George W Bush has to negotiate trade deals expires, making it harder for him to win congressional approval for a treaty. Mr Lamy warned that the richer members of the WTO must now keep the negotiation process going, saying: "We have missed a very important opportunity to prove that multilateralism works." EU Commissioner Mandelson said he was "profoundly disappointed" that talks had stumbled, mainly as a result of America's inflexibility. "What they're saying is that for every dollar that they strip out of their trade-distorting farm subsidies they want to be given a dollar's worth of market access in developing country markets," he said. "That is not acceptable to developing countries and it's a principle that I on Europe's behalf certainly couldn't sign up to either." US trade representative Susan Schwab insisted the US remained "fully committed to multilateral trading system". But she said that "a number of developed and advanced developing countries were looking for ways to be less ambitious, to avoid making ambitious contributions". Meanwhile, Senator Charles Grassley, chairman of the Senate finance committee that would have to approve any trade deal, backed the stance of the US trade negotiators. "I've always said that no deal is better than a bad deal, and a 'Doha light' deal would be a bad deal," he said. "I'm glad our trade negotiators held their ground."

'Terrible blow'
The EU, US, Brazil, Australia, India and Japan have been negotiating a deal to boost world trade in industrial and agricultural goods. Charity Christian Aid said that the collapse of talks struck "a terrible blow" for the world's poor. It had removed the most important weapon in the fight against global poverty, the charity's senior trade analyst Dr Claire Melamed said. But John Hilary, director of campaigns and policy at War on Want, said the collapse was good for the world's poor. "Any chance of a genuinely pro-poor outcome was lost long ago, and the deal on the table would have caused great damage to developing countries," he said.

Global Trade Talks Reach an Impasse

WASHINGTON - International trade talks, launched five years ago to
reduce tariffs, quotas and other barriers to commerce worldwide,
broke down in Geneva amid bitter recriminations between the United
States and Europe. By Joel Havemann.
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Ruling Threatens Consumer Lawsuits

Dozens of consumer lawsuits could be jeopardized by a state
Supreme Court ruling that a 2004 ballot proposition limiting suits
against businesses applies to cases filed before the law was
passed. By Martin Zimmerman.
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Hospital Giant HCA Agrees to Buyout

A $21.3-billion deal for the largest hospital chain shows optimism
about the industry. By Daniel Yi.
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LAS VEGAS - NBA millionaires, perhaps chastened by recent U.S.
basketball failures, are buying into Duke coach Mike Krzyzewski's
collegiate approach. By Robyn Norwood.
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Creditors vote to bankrupt Yukos BBC News
Creditors of the Russian oil company Yukos have voted overwhelmingly to ask a bankruptcy court to liquidate the beleaguered firm.The court is almost certain to agree to the request at a hearing scheduled for August 1 and will appoint a supervisor to sell its assets. They rejected a last-ditch rescue plan put forward by Yukos management. The decision will spell the end for what used to be the country's biggest privately-owned oil firm. Russian tax authorities and state-owned oil giant Rosneft are among creditors chasing Yukos for $17bn. Assets likely to be sold off include some of Russia's biggest refineries with Rosneft among those who could benefit.

Conspiracy theory
Last week, Steven Theede quit as Yukos boss after denouncing the creditors' meeting as a "sham". Yukos has struggled to survive after a series of tax demands totalling $27bn. It says the demands are linked to a political campaign against its founder, Mikhail Khodorkovsky, who is currently serving a long prison sentence in Siberia. In 2004, the back tax bill led to Yukos' main Yuganskneftegaz subsidiary being expropriated by the government and sold off at auction - to be ultimately acquired by Rosneft. The sale led to a legal challenge from Yukos when Rosneft floated on the London Stock Exchange. In his resignation letter, Mr Theede said the creditors' meeting would be "attended by those who are intent on destroying the rest of Yukos and taking its assets with no serious consideration being given to our financial restructuring plan". He added that he had been told court-appointed bankruptcy manager, Eduard Rebgun, had prepared a report for the creditors stating that a financial restructuring was impossible and the company should be liquidated.

Profit Climbs 27% at Lender

No. 1 U.S. mortgage lender Countrywide Financial Corp. reported a
27% jump in quarterly earnings but said its loan volume slipped
because it refused to follow rivals in grabbing market share at
any price. By E. Scott Reckard.
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Owner's Balancing Act

Dave Hansen's goal is to keep expanding his Jax Bicycle chain, but
he still tries to maintain personal contact with clients. By David
Colker.
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Earnings Suggest GM Recovery Is on Course

General Motors Corp. posted surprisingly strong second-quarter
results as cost savings from a massive restructuring plan began to
kick in and its struggling U.S. auto operations showed signs of
life. By Martin Zimmerman.
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More Data on Pay at the Top Is Mandated

WASHINGTON-The SEC votes to require more-detailed, 'plain English'
disclosure of executive compensation. By Jonathan Peterson and
Kathy M. Kristof.
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Producer of 9/11 Movie Had Her Own Tragic Story

Debra Hill provided the impetus to 'World Trade Center' but didn't
live to see the finished film. By Claudia Eller.
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Agents Created Frenzy Around USC

Trojans' wealth of football talent last season led to a feeding
frenzy of agents that had Carroll seeking a change in the rules By
David Wharton and Gary Klein.
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Curb, and Pocket, Appeal

Can a well-crafted home be built for $100,000? Karrie Jacobs set
off on a road trip and found just that. By David Hay.
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Kazaa site becomes legal service BBC News
File-sharing site Kazaa will become a legal music download service following a series of high profile legal battles. The peer-to-peer network has also agreed to pay $100m (£53m) in damages to the record industry. The announcement follows the release of a music industry report that says more than 20 billion music tracks have been downloaded illegally in the last year. File sharing and music piracy are key factors in the recent decline in record sales, according to the music business. "We have won another battle in an ongoing war," said John Kennedy, chairman and CEO of the International Federation of the Phonographic Industries (IFPI). "We move forward with a spring in our step." Kazaa follows other sites like Napster which now offers legal downloads. Mark Mulligan, an analyst with Jupiter Research said the amount of damages that Kazaa are willing to pay demonstrates how big the service had become. "$100m is half of the legitimate music downloads market in Europe," he said. At its peak the site had more than four million simultaneous users. The Kazaa software has been downloaded 239 million times.

Legal fight
The decision by Kazaa follows a series of legal wrangles around the world. Last year an Australian court ruled that the file-swapping program encouraged users to breach copyright. The Federal Court ordered Kazaa's owners, Sharman Networks, to modify the software to prevent further piracy.The modifications included a filtering system on 3,000 keywords to prevent users finding copyrighted material. It was unclear whether the move prevented music piracy as many file-swappers stopped using Kazaa in favour of other networks. The illegal music market is huge. A report by the IFPI provides a snapshot of music piracy. It focuses on pirated CDs and illegal music downloads which are either swapped through peer-to-peer networks or downloaded from sites the IFPI says are illegal. The report estimates that 20 billion music tracks have been downloaded. It highlights 10 countries that need to step up their fight in tackling music piracy. Some of the worst offenders, says the IFPI, include Brazil and Canada. The two countries downloaded more than two billion tracks. Other offenders, according to the report, include Italy which the IFPI estimates has 2.7 million illegal file sharers.

Counterfeit goods
The annual study also estimates that 1.2 billion fake CDs were sold in 2005, the same number as were sold in 2004. "We're not sure whether we should be pleased that it has not increased or displeased that it has not gone down," said Mr Kennedy. "We're not proud or disappointed." The IFPI calculates that the global traffic in illegal CDs is worth $4.5 billion (£2.4 billion), down $100m from 2004. The IFPI points the finger at China as the largest producer of pirate discs. It says that 85% of discs produced in the country are illegal. The IFPI also highlights Mexico as a hub of pirate material. The North American country did not feature in last year's report of worst offenders. But in 2005 the IFPI report that "110 million physical pirate products" were sold in the country. As a result, Mexico has become a focus for the IFPI. Last year the body launched a new initiative called Mexico Plus that saw the IFPI working with the authorities in Guadalajara to close pirate market stalls. The initiative saw the number of pirate CD stands fall by 80% in the city and the number of legitimate music sales rise by more than a quarter. The IFPI has also been fighting music piracy on the web, taking a number of individuals and high profile sites like Kazaa to court. According to Mr Mulligan, some of their efforts are now having an effect. "The market is now fragmenting. Unless you are an ardent downloader it is becoming harder to know where to go," he said. Services like iTunes, Yahoo Music and Wippit offer an alternative. The IFPI say the legitimate download market now consists of over 360 sites offering three million tracks for download. The legal download market last year was worth $1.1 billion globally, they say.

Kazaa Settles Piracy Suits

The file-sharing service's operator pays the movie and music
industries more than $115 million. By Dawn C. Chmielewski and
Charles Duhigg.
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Speedier Intel Chips Take Aim at AMD

SANTA CLARA, Calif.-The new processors give Intel a technical edge
against its rival, analysts say. A price war looms. By Terril Yue
Jones.
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A Mind of Their Own

Artificial intelligence software enables animators to create
detailed crowds filled with characters that can react autonomously
to one another. By Richard Verrier.
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Growth slows, prices up in second quarter Reuters
US economic growth slowed abruptly during the second quarter to less than half the pace seen at the beginning of the year, while a key gauge of inflation accelerated, the Commerce Department said on Friday. The sharp slowdown raised expectations that the Federal Reserve might halt its two-year-old campaign of interest-rate rises, and fueled a broad-based rise in bond prices on hopes a rate rise pause was near. Gross domestic product grew at a 2.5 percent annual rate in the April-June quarter, well below Wall Street analysts' forecasts for 3 percent and less than half the robust 5.6 percent rate registered in the first quarter. Slower consumer spending, especially on costly durable goods like new cars, was a key reason. But export growth also slowed, government spending was weaker and housing investment turned down. At the same time, an inflation gauge favored by the Federal Reserve - a measure of personal consumption expenditure prices minus food and energy - jumped at a 2.9 percent rate in the second quarter, well ahead of the first quarter's 2.1 percent. Department officials said it was the fastest rate of increase for the gauge of so-called core inflation in nearly a dozen years, since the third quarter of 1994 when it jumped at a 3.2 percent rate. The dollar's value weakened against other major currencies, while the stock futures market pointed to higher prices at the opening of trade. "GDP is surprisingly low and it means less chance of the Fed doing something," said economist Robert Macintosh of Eaton Vance Management in Boston. Foreign exchange analyst Korman Tam of MG Financial in New York similarly said the GDP report appeared to buttress signs of a broad-based slowdown reported earlier in the week in the Fed's anecdotal Beige Book survey of national economic conditions. "It confirms suspicions and raises expectations that the Fed will actually pause in August," Tam said. Separately, the Labor Department reported that its Employment Cost Index, which covers wages, salaries and benefits, climbed by a bigger-than-expected 0.9 percent in the second quarter. That exceeded the first quarter's 0.6 percent rate of increase and was the largest since the first quarter of 2005 -- a potential warning sign on inflation. The economy had been widely expected to slow after a sizzling first quarter, in part because a cooling housing market coupled with soaring gasoline prices is expected to act as a brake on consumer spending. Fed Chairman Ben Bernanke told Congress last week he expected softer growth to restrain inflation over time, though it was not apparent in Friday's second-quarter GDP data. The GDP report included annual revisions that covered the period from the beginning of 2003 through 2005. They showed moderately slower growth than first estimated, with the economy growing at an average annual rate of 3.2 percent over the period, 0.3 percentage point less than previously reported. During the second quarter, consumer spending that fuels about two-thirds of national economic activity increased at a 2.5 percent annual rate, sharply below the first quarter's 4.8 percent. Business investment slowed to a 2.7 percent rate of increase, a fraction of the first quarter's 13.7 percent and the slowest since a 1.7 percent rate of growth in the first quarter of 2004. Business spending on new computers and software, after soaring at a 15.6 percent rate in the first quarter, shrank 1 percent in the second quarter, the first fall in this category of spending since the start of 2003. Underlining the growing softness in housing, investment in residential construction shrank for a third successive quarter, declining at a 6.3 percent rate during the second quarter after falling 0.3 percent in the first quarter and 0.9 percent in the final quarter of last year.
By Glenn Somerville, Reuters
US Growth Cools as Business, Consumer Demand Slows Bloomberg
Economy slows sharply as inflation heats up MSNBC
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Brakes slam on US economic growth BBC News
The US economy, the world's largest, has slowed in the second quarter of the year, on the back of rising interest rates and soaring energy costs.
Gross domestic product (GDP) grew at an annual rate of 2.5% in the three months to the end of June, compared to a 5.6% annual rate in the previous quarter. Some slowdown had been expected, but its severity comes as a surprise. The US dollar dropped on the news, as analysts questioned their forecasts for annual US economic growth. The Federal Reserve predicts that the US economy will expand by 3.5% this year, compared with a growth rate of 3.2% in 2005.

Big question
Shaun Osborne, a strategist at Scotia Capital, said that Friday's Commerce Department report would "probably underpin expectations that US growth will slow quite sharply in the second half of the year and into 2007". One of the main factors in the recent slowdown in growth has been a weakening of consumer activity. As a result, many analysts are now predicting that the Federal Reserve, the US central bank, will put off interest rate increases, despite inflationary pressure from the high energy costs. The Fed has been slowly raising its borrowing costs as the economy has picked up pace, lifting interest rates 17 times in a row to 5.25%, the highest level in more than five years. "The question that's been overhanging the financial markets is whether the Fed will tighten again," said David Resler, an economist at Nomura Securities. "This says not and this says why. Consumer spending has slowed fairly significantly," he added. "I see very little reason for the Fed to do anything in August."

Still lingering
US stock indexes rose in New York as investors bet that interest rates would not rise further. Fears that higher borrowing costs would squeeze corporate profits had prompted a global stocks sell-off last month. However, the worries have not dissipated completely and the report on GDP showed that a closely-watched inflation measure had increased. According to the report from the Commerce Department, core prices - excluding food and energy - increased at an annual rate of 2.9% in the second quarter, as opposed to 2.1% in the first three months of the year. Personal consumption expenditures (PCE), meanwhile, increased by 4.1%, more than double the 2% rate of the preceding quarter. A separate report from the Labor Department showed that it was becoming more expensive for employers to hire and keep workers, another factor that may also fuel inflation. Michael Metz, an analyst at Oppenheimer Holdings, said that while the consumer had proved to be "pretty resilient", that could change if inflation and rates keep rising. And that would have further negative effects on the rate of economic growth, he added.

Heatwave hits vegetable supplies BBC News
Supermarket vegetable aisles may be the latest victim of the hot summer. High temperatures mean vegetables are maturing faster than farmers can pick and package them, an agricultural body has warned. The extreme heat has struck down crops across Europe, with economies in the east suffering in particular. In Poland and Hungary some crops are expected to be 40% below normal yields, the Association of European Fruit and Vegetable Processing Industries warned. It said the very hot weather was creating a short picking season that might deplete frozen vegetable supplies.

Continental crisis
The heatwave has also raised the spectre of forest fires in Central Europe, adding to farmers' concerns. In the UK the Processed Vegetable Growers' Association (PVGA) forecasts price rises and shortages as the extreme weather bites into harvests. The PVGA predicted that yields of peas, broad beans, cauliflower and spinach could drop by 20%. But the fears were contradicted by Sainsbury's, which remains confident that it can keep its stores full of fresh produce.

Don't panic
"This is a bit of a storm in a vegetable basket and we do not envisage any shortage," a Sainsbury's spokeswoman said. She pointed out that the season for some greens was coming to an end in the UK, and other vegetables - such as carrots or potatoes - were in plentiful supply. While Sainsbury's has a policy of sourcing food from the UK whenever possible, it does import vegetables from overseas, meaning that supermarket shelves are less vulnerable to local factors. Fears that the very hot weather will disrupt vegetable supplies stems from the way each line of produce is managed on the farm. Crops are planted so that each field is ready to be harvested at different times, allowing vegetable pickers to keep up a steady supply throughout the season. Very hot weather has wrecked this schedule and left farmers scrambling to bring in crops before they spoil, according to the PVGA.

Stocks Rally on News of Slowdown

NEW YORK-Stocks rose and bond yields fell sharply Friday as
mounting evidence of an economic slowdown stirred new hopes that
the Federal Reserve would stop raising interest rates. By Walter
Hamilton.
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Oil Heats Up a Housing Market

CARACAS, Venezuela-Petrodollars contribute to soaring prices in
Caracas. Some blame the president's socialist policies for the
lack of new construction. By Chris Kraul.
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Chevron's Net Income Jumps 18%

Persistently high oil and gasoline prices give the company another
record quarter. But its shares slip because the results miss
forecasts. By Elizabeth Douglass.
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Steve Lopez: Unreal Estate Is More Like It
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Mines Dig for Talent

HIBBING, Minn. - Minnesota's iron ore industry, like many other
U.S. industrial sectors, faces a looming labor shortage as nearly
half its workers become eligible for retirement in the next few
years. By Evelyn Iritani.
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Manhattan's Financial District Remade by Influx of Residents

NEW YORK - A post-9/11 exodus of firms from Wall Street speeds up
a drab area's transformation into a vibrant neighborhood. By
Walter Hamilton.
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Calming D.C.'s Movie Critics

WASHINGTON - Viacom quietly works Capitol Hill to avert a backlash
to a 9/11 film by director Oliver Stone. By Jim Puzzanghera.
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U.S. Employers Looking to Outsource Healthcare

As costs rise, workers are being sent abroad to get operations
that cost tens of thousands more in the U.S. By Daniel Yi.
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Exit Plan: Follow Nissan

With so many workers opting to relocate to Tennessee, the message
may be that California's charms aren't what they used to be. By
John O'Dell.
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Tom Cruise's Studio Pact Is in Question

Paramount Pictures is said to be in talks with the actor and his
business partner to slash the price of their production
arrangement. By Claudia Eller.
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'Miami Vice' Arrests 'Pirates' at Weekend Box Office

The cop-show adaptation ends the theme-park-ride adaptation's
winning streak, grossing an estimated $25.2 million in the U.S.
and Canada. By Josh Friedman.
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The TV Deal the NBA Wishes It Had Not Made

The Silnas of the ABA's St. Louis Spirits still cash in on the
contract that began with the merger in 1976. By Jonathan Abrams.
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How the West Was Sold

Not every iota of federally owned land is an environmental
treasure crying out for protection. Some portions would be better
sold for private development. That's especially true within the
vast Western holdings of the Bureau of Land Management. But new
proposals to auction BLM property near some towns come with a
troubling twist:.
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Game Expo E3 to Scale Down

In a setback for the L.A. convention center, the 2007 event will
be held throughout the city. By Kimi Yoshino.
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Oil Price Jump Could End Relief at Pump

Motorists in California and nationwide caught a small break at the
gas pump last week, but a renewed surge in oil prices could make
it a short-lived reprieve. By Martin Zimmerman.
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Dodgers Attempt to Trade Up

The Dodgers added a pitcher bound for the Hall of Fame, swapped a
middle infielder, acquired a better-hitting middle infielder and
traded away a quality prospect in the final minutes before
Monday's 1 p.m. trading deadline. By Bill Shaikin.
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Bill Plaschke: Trades Fuel Dodgers for the Pennant Drive
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Attack of the Dolls

With a string of hit singles, there's at least no denying the
sales appeal of The Pussycat Dolls. By Chris Lee.
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Is film biz just a sellers' market?

To hear the talk, the dark ages are upon us. Producers are glum
because studios are killing their deals left and right. The agents
and managers are bummed because after untold years of actor and
filmmaker salaries heading in only one direction - up - studios
are putting the squeeze on talent, having recently killed a series
of costly star-driven movies in favor of more manageable genre
pictures and family films. By Patrick Goldstein.
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Senate OKs offshore drilling in gulf, but not other areas Daily Press
The Senate easily passed a bill Tuesday that would restrict offshore drilling for gas and oil to the Gulf of Mexico, dealing a blow to those seeking to open Virginia's coast to energy production. By a lopsided margin of 71 to 25, the Senate approved a measure that would open vast new areas of the Gulf of Mexico to oil and gas drilling in an attempt to boost domestic production and wean the nation off foreign oil. But the bill stops far short of a competing House measure pushed by Virginians that would open the nation's entire coastlines to drilling under certain conditions with state approvals. A federal ban has prevented drilling in virtually all coastal waters of the country except parts of the gulf for the past 25 years. The Senate vote sets the stage for contentious negotiations this fall with the House over the scope of any new offshore drilling measure. Failure to reach a compromise would kill the legislation for the year. Virginia senators had sought to amend the Senate bill to broaden it beyond the Gulf of Mexico. Sen. George Allen, R-Va., and Sen. John W. Warner, R-Va., had offered amendments giving Virginia and other coastal states the option to drill off their coasts. But neither amendment was given consideration under Senate procedural rules that cleared the way for a swift up-or-down vote on the bill. Both Virginia Republicans vowed to continue working to give their state the ability to drill if it wishes. After offering his amendment Monday, Warner told his colleagues: "I will return to this floor time and time again, as long as I can draw breath, to fight for the rights of the individual coastal states to decide for themselves - not to be mandated by the federal government - but to decide for themselves whether they want to step up and help America reach its energy needs." Environmentalists have decried the drilling measure, saying it would do little to meet the nation's energy needs while posing needless risks to marine life. But drilling advocates say improved technology has minimized the environmental risk. Boosting domestic production, they say, will be a critical part of any comprehensive energy program. "We are far too dependent on foreign sources of energy, and this common-sense legislation will help spur a long stride forward in America's energy independence," Allen said. The House measure, passed in June, would open most U.S. waters to drilling 100 miles from shore and give coastal states the option to drill closer to their beaches. Authors of the House measure said Tuesday they hope to broaden the Senate bill beyond just the Gulf of Mexico. But some Democratic senators, who joined Republicans in supporting the Gulf measure, made clear they would oppose the more sweeping House plan. "Let there be a warning to people in the House not to take advantage of our good faith here," said Sen. Charles Schumer, D-N.Y., who voted for the Senate bill. Virginia lawmakers have estimated the state could reap more than $3 billion in drilling royalties over 20 years if the federal drilling ban is lifted.
Senate Approves More Offshore Drilling Washington Post
Senate Approves More Offshore Drilling ABC News
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Toyota Tops Ford in U.S. Sales in July

Riding high on its image as a leader in fuel efficiency, Toyota
Motor Corp. surpassed Ford Motor Co. in July to become, for the
first time, the nation's No. 2 auto retailer. By John O'Dell.
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Firm Tries to Chip Away at Semiconductor Waste

San Jose-based TecHarmonic targets the noxious gases in the
manufacturing process. By Terril Yue Jones.
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Such a Deal?

Prefab can be pricey these days, as this Ocean Park home reveals.
By Christopher Hawthorne.
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Welcome Hot Air from Arnold and Blair

Global-warming pact between the California governor and British
prime minister may not amount to much, but it's a welcome sign.
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AOL Seeks Payoff With Free Services

NEW YORK-Time Warner's Internet business will drop its access fees
for high-speed connection next month as it makes an effort to
increase advertising. By Thomas S. Mulligan and Chris Gaither.
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Gas Costs Eat Into Restaurant Sales

Consumers are dining out less as pump prices climb. Cheesecake
Factory and Chili's are among the chains reporting declines. By
Jerry Hirsch.
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Merck Wins Vioxx Trial in L.A.

A jury concludes that the painkiller didn't cause a Northridge
man's heart attack. By Lisa Girion.
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Feds Sue 2 of Chumash Tribe's Accountants Over Alleged Tax Scam

The pair are accused of running a fraudulent tax avoidance scheme.
Tribal officials did not endorse the program. By Glenn F. Bunting.
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Getty Board Chair Biggs Steps Down

Citing the job's 'heavy responsibilities,' John Biggs will resign
eight months early. Some of his key decisions have been strongly
criticized. By Jason Felch and Ralph Frammolino.
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USAA Plans Cuts in Home Insurance Premiums

SACRAMENTO-The state's fifth-largest homeowners' insurer, USAA,
said that it would cut premiums by an average of 22% in the fall
and save policyholders $55 million next year. By Marc Lifsher.
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Firms Said to Stop Shipping to Music Chain

At least three companies suspend deliveries of albums to
struggling Tower Records, which has stopped paying its bills,
sources say. By Charles Duhigg and Geoff Boucher.
http://email.latimes.com/cgi-bin1/DM/y/e6W...Io30G2B0HlAy0ES

Editorial: Justice After Guantanamo

The White House still thinks the ends justifies the means in
trying suspected terrorists.
http://email.latimes.com/cgi-bin1/DM/y/e6W...Io30G2B0HlA60EL

George Weigel: No Tears for Fidel, Please

The murderous dictator put revolution ahead of country, so shed
them for the people and way of life he repressed.
http://email.latimes.com/cgi-bin1/DM/y/e6W...Io30G2B0HlA70EM

Google forges ties with MySpace, MTV Yahoo! News
Google announced deals to handle Internet search and advertising at the popular social networking website MySpace and to distribute ad-laced MTV videos. The alliances fortified Google's reputation as an online juggernaut that has masterfully turned content, search queries and free services into advertising revenue fortunes. Google will exclusively handle Internet search and keyword targeted advertising at MySpace.com and most of the rest of the online properties owned by News Corporation's Fox Interactive Media, according to the companies. The MySpace website, a virtual clubhouse where teenagers bare details of their lives through journals, photos, and videos, has star status on the Internet. The contract with Google also answers industry analysts' questions about when and how someone would cash in on the advertising potential of the popular social networking website consisting purely of content provided by users. Google guaranteed Fox that its share of ad revenue would be at least 900 million dollars from 2007 through the second quarter of 2010, under the terms of the contract. Google's services would be integrated into websites of Los Angeles-based Interactive Media beginning later this year, the companies said. "This agreement demonstrates our commitment to bring the same innovation to monetizing user-generated content that we brought to search advertising," said Omid Kordestani, senior vice president of global sales and business development at Google. "This is just the first of many steps we plan to take with Google," News Corporation president Peter Chernin said in a release. "We look forward to expanding our relationship into many new areas over years to come." Google's deal with Viacom's MTV Networks was a landmark alliance to distribute ad-supported videos to website publishers, Google and Viacom said in a joint release. Among the programs that will be offered were Nickelodeon's Spongebob Squarepants and the MTV show Laguna Beach, according to Viacom, which is based in New York City. "Collaborating with Google gives us a terrific opportunity to take our content and distribute it even more widely on the web in a seamless and targeted way," said Viacom chief executive officer Tom Freston. "We're very happy to be working with Google, a true innovator in content distribution." A test version of the service should be running by the end of this month, the companies said. "We're excited to work with MTV Networks on new ways of distributing its content to consumers via the Internet and on Google Video," Google chief executive officer Eric Schmidt said in a release. "With the combination of our video technology, and extensive advertiser and publisher network, Google is in a leading position to help content owners, web publishers and advertisers generate interest and increase revenue opportunities."
by Glenn Chapman

Welcome, Corporate Bloggers Socialtwister
In what can only be filed under the “music-to-my-ears” category, Jupiter has a new study out discussing the increasing penetration of blogging into the corporate messaging mix:I guess I have a few really big questions (something I sure that can be answered by someone with access to the actual report):

• What constitutes a large company?
• Isn’t this year almost over?
• What exactly costs $500K? My guess is the content

Of course, another very important question remains: What’s the story look like on the small business front?

Softbank Capital invests $5 mln in Huffington Post Yahoo! News
The Huffington Post, an online news and blogging site run by political commentator Arianna Huffington, said on Monday that it has received a $5 million investment led by venture capital firm SoftBank Capital to help it expand. The investment marks the site's first round of venture capital funding. Alan Patricof's Greycroft Partners also invested in the latest round, the Huffington Post said in a statement. The Huffington Post, www.huffingtonpost.com, was launched with about $2.5 million raised from friends and family, Huffington said in an interview. It runs on advertising revenue, but Huffington said she wants to expand the site's offerings. "Advertising would not be sufficient for this expansion," she said. Plans include hiring staff to update the site 24 hours a day, and hiring in-house reporters as well as multimedia staff to do video reports, Huffington said. The investment is the latest sign of interest in online news operations as traditional media fight to hold on to their viewers, readers and advertising dollars amid blogs, Internet-only news and other free options. Huffington launched the Huffington Post site a little more than a year ago. She touted it as a place where celebrities, political figures and a varied list of invitees could post their musings -- often on political topics of the day -- alongside wire dispatches and other news reports. The site now contains blog entries from more than 750 contributors, including recent ones from playwright and film director
David Mamet and actor Alec Baldwin.

Fed Opts to Hold Interest Rates Steady

WASHINGTON - The Federal Reserve called at least a temporary halt
to its 2-year-old campaign to raise short-term interest rates,
suggesting that a slowing economy and previous rate hikes might
cool inflation. By Joel Havemann.
http://email.latimes.com/cgi-bin1/DM/y/e6l...Io30G2B0Hl3N0EX

Greeting-Card Business Is Not All Rosy and Sweet

Sisters may need more than creativity to keep their company afloat
in a crowded marketplace. By David Colker.
http://email.latimes.com/cgi-bin1/DM/y/e6l...Io30G2B0Hl3O0EY

Zorpia Launches Social Network Site for China; Company Plans to Launch More Than 22 Social Networking Portals Worldwide Sys-con Media
The battle between social networks is unrestrained and showing no sign of slowing down in the next 24-48 months. The "Social Network Wars" have begun and Zorpia Ltd. is on a quest for global domination. Today the company announced the launch of its new Chinese social networking site at Zorpia.cn ( http://www.zorpia.cn/ ). Zorpia's expansion into China is the first step in an aggressive global expansion plan of taking on 22 additional markets including the UK, Australia, Canada, India, Taiwan, Japan, Europe, Latin America, and beyond. While the English version of the Zorpia website ( http://www.zorpia.com/ ) adds thousands of new users daily, the Chinese version of the Zorpia website is expected to generate millions of new users pulled from mainland China. "We see Zorpia.com as the first 'Global Social Network,'" founder Jeffrey Ng said. "Zorpia was initially designed for sharing non-personal photos," said Ng. "What we discovered is that people actually preferred sharing personal photos while making friends with one another. We plan to leverage our technology platform to launch multiple niche social networking sites, as well as a business network site and a social network for mobile technology users -- to go beyond being a networking site for teens." According to eMarketer Research, companies around the world plan to spend an estimated $2.5 billion on advertising on social networks by 2010, an increase of $350 million from 2006. (Source: http://www.emarketer.com/Article.aspx?1004077 ) "We're not just about building online communities," said Ng, "In addition to beefing up our features and tools, we are proactively seeking new opportunities to generate additional revenue streams through our network of portals. Social networking is not a fad that will disappear anytime soon." In the past year, Zorpia.com has added more than three million registered users. The site hosts over 13.6 million photos (over 20,000 new photos are being added daily), and receives more than 3.6 million page views daily.

About Zorpia.com
Founded in 2003, Hong Kong-based Zorpia provides a social network community where users share unlimited photos, post journal or forum entries, and customized personal profiles. Zorpia Ltd. is a privately owned company and is currently seeking venture capital to expand operations worldwide. Contact: Jeffrey Ng, CEO, Zorpia, Ltd. (650) 331-7390 Website: http://www.zorpia.com/ Chinese Site: http://www.zopria.cn/
This release was issued through The Xpress Press News Service, merging e-mail and satellite distribution technologies to reach business analysts and media outlets worldwide. For more information, visit http://www.xpresspress.com/ .
Zorpia, Ltd.
CONTACT: Jeffrey Ng, CEO, Zorpia, Ltd., +1-650-331-7390, or press@Zorpia.com
Web site: http://www.zorpia.com/ - http://www.zopria.cn/

Brocade to Buy McData for $713 Million in Stock E-Commerce Times
Brocade Communications Systems will acquire McData in an all-stock deal worth US$713 million. Brocade said the deal will boost adjusted per-share earnings by the fourth quarter of combined operations. The company expects annual efficiencies of about $100 million, and will include
Networking equipment maker Brocade Communications Systems. Latest News about Brocade Communications Systems on Tuesday said it has agreed to acquire McData in an all-stock deal worth US$713 million. Under the terms of the deal, McData shareholders will receive 0.75 share of Brocade common stock for each McData share they hold. The exchange is worth about $4.61 per McData share, based on Brocade's closing price of $6.14 Monday on the Nasdaq.

Joining Forces
McData class A shares closed Monday at $3.11 and class B shares ended trading at $2.85, both on the Nasdaq. Broomfield, Colo.-based McData makes switches, routers and extension products for computer networks. Brocade said the deal will boost adjusted per-share earnings by the fourth quarter of combined operations. The company expects annual efficiencies of about $100 million, and will include savings from personnel. Brocade said its executive management will retain their positions. McData Chief Executive John Kelley will serve as an adviser to the combined company, and two McData directors are expected to join the Brocade board when the deal closes.

Brocade Shares Drop
When the transaction is complete, McData shareholders will own about 30 percent of San Jose, Calif.-based Brocade. The deal is expected to close in Brocade's fiscal first quarter, which ends in January, subject to approval by the stockholders of both companies. McData will afterward become a wholly owned subsidiary of Brocade. Separately, both companies released preliminary results for the three months ending in July. Shares of Brocade dipped 39 cents, or 6.4 percent, to $5.75 in premarket trading on the INET electronic exchange. McData class A shares gained 99 cents, or 32 percent, to $4.10 on INET. Class B shares were not trading in the early session.

US stock options inquiry deepens BBC News
US authorities have charged three former bosses at voicemail software firm Comverse with fraud over the alleged manipulation of stock options.The Securities and Exchange Commission and Justice Department issued civil and criminal charges against the trio. More than 80 companies including Apple Computer have said they are either investigating their own option schemes or are being probed by the government. The inquiries relate to the backdating of stock options to boost their value.

Proper accounting
Stock options are part of many senior executive salary packages, and were a popular way of attracting and retaining employees at technology firms during the dot.com boom period of the late 1990s and early 2000s. They give a person the right to buy a certain amount of shares in their company, within a certain period at a particular price - which is usually set at whatever the company's share price is on the day the option is granted. Backdating involves increasing the value of stock options by pinning their "exercise price" - the price at which they can be bought - to a low point in the company's share price history. Although it is not illegal to backdate options, federal prosecutors have said they will prosecute if the backdated options were not properly accounted for. Failure to account for backdated options can result in a company's profits being overstated and taxes underpaid - both of which are damaging for investors.

'Proceeds wired'
In its complaint issued on Wednesday, the Securities and Exchange Commission (SEC) accused former Comverse chief executive Jacob "Kobi" Alexander and finance chief David Kreinberg of using fictitious names to create stock options that were kept in a slush fund so that they could be used later to recruit or retain workers. It said Mr Alexander wired $60m (£31m) to Israel from the proceeds of fraudulent stock options.Together with former Comverse general counsel William Sorin, the two were charged with conspiracy to commit securities fraud, mail fraud and wire fraud. None of the accused or their legal representatives have so far been available to comment. Gregory Reyes, the former head of computer firm Brocade Communications, was the first executive charged as part of the options investigation back in July.

Juicy Details in Option Scandal

A tale of fake workers and a slush fund makes it harder to deny
that backdating was abusive. By Tom Petruno.
http://email.latimes.com/cgi-bin1/DM/y/e6s...Io30G2B0HmYp0EF

Adapting to Nature

NEW ORLEANS-After Hurricane Katrina devastated New Orleans'
businesses, many left and did not return. But some small companies
did reopen and found that to survive, they had to adjust to the
region's needs. By Ann M. Simmons.
http://email.latimes.com/cgi-bin1/DM/y/e6s...Io30G2B0HmYq0EG

You're the Boss, So Get to Work

Sell your own house and you may save the commission but pay in
headaches. By T.J. Sullivan.
http://email.latimes.com/cgi-bin1/DM/y/e6s...Io30G2B0HmYw0EM

Korean social networking phenomenon aims to crack American market
Acorns, cartoon alter-egos and bubble-gum kitsch may not seem like the most intimidating weapons for a brazen cultural invasion, but those are the tools Henry Chon is brandishing. The chief executive of Cyworld is hoping to translate the hugely popular Korean website Cyworld.com into a hip destination for American teens and 20-somethings. Chon and Cyworld's deep-pocketed backers in Seoul are betting the U.S. site, scheduled to launch Aug. 15, becomes as big a phenomenon here as in South Korea, where nine out of 10 citizens between 24 and 29 are members. "Once Americans see the value of Cyworld, they'll make sure their friends and family use it," said Chon, who keeps photos of his daughter, Chloe, on his Cyworld home page. "We're here to build a meaningful, good community." Critics question how an Asian company with fewer than 30 U.S. employees can compete against social networking giants like Myspace, owned by Rupert Murdoch's News Corp., which has more than 100 million member profiles and an average of 230,000 new members every day, or Facebook, which as more than 7.5 million members in high schools and colleges. Even if it catches on with its target audience of people in their late teens, business experts say Cyworld, like Friendster or Xanga, could be eclipsed by a trendier site in the crowded social networking niche. "In America, I'd say we're beyond saturation and we're quickly reaching a point of overkill," said Rob Enderle, an analyst who studies consumer behavior online. "So I'm not sure why a Korean company would want to try to compete." Kristin Torres, a 17-year-old high school senior from Fresno, said defecting to Cyworld from Myspace, which she checks three or four times a day, would be tantamount to dumping 196 friends she has in her Myspace community. "The likelihood that we'd all switch to another site — well, I don't think that would happen, so I wouldn't have the same group of friends if I went to another site," Torres said. In translating the site for Westerners, Cyworld has stripped down the text-heavy Korean model and eliminated some features for cellphones, a popular way of accessing the site in Cyworld's other markets: China, Japan and Taiwan. But competitors question whether Americans would develop a cultural affinity for the uniquely Asian look and feel of the site, owned by a subsidiary of mobile telecommunications congolmerate SK Telecom Co. Although Asian companies prosper in the U.S. markets for automobiles and electronics, American Internet brands such as eBay, Google and Amazon have few significant foreign rivals. Yahoo — the top Internet site in Japan, India and Taiwan — doesn't merely tweak its American sites for users abroad but completely retools them for each market, said Yahoo Senior Vice President Brad Garlinghouse. "The Korean market has been very innovative and has created new paradigms — but in some ways they're unique to the Korean market and won't work here," Garlinghouse said. Cyworld executives are hopeful that Americans will keep an open mind and at least check out the newest social networking player, which has a futuristic look and unique business model. Cyworld is a virtual world unto itself. The centerpiece is the avatar — a member's virtual alter-ego, a cartoon character who assumes the clothes, hairstyle and hobbies of the member's choosing. Avatars conduct their entire lives in Cyworld's parallel universe, visiting each other in forums dedicated to cooking or rock climbing. They visit "cybuddies" in three-dimensional "minihomes," decorated with art, electronics, furniture and stereo systems. Cyworld's virtual economy centers on a currency called the dotori, Korean for "acorn." Members buy dotori with credit cards or in cash at convenience stores throughout South Korea. They purchase furnishings for their minihomes or buy their avatars special clothes or logos. They buy gifts such as get-well-soon cards and virtual flowers to appear in minirooms for convalescing. The average Korean member buys about $7 worth of virtual couches, clothes and other items per year. Cyworld sells 200 million songs each year for about 50 cents each, making it second to Apple Computer Inc.'s iTunes for global online music sales, executives said. The company is negotiating with American music labels to sell songs on its U.S. site. Cyworld doesn't strive to enlarge a user's community of online cohorts or bring together strangers who might never meet in person. It emphasizes relationships between relatives, neighborhood friends and co-workers — people who have already met in real life but yearn to also hang out in cyberspace. Cyworld aims to follow these groups from high school and college to the career track, dating, marriage and parenthood. One in three South Koreans has an account, and an average of 6.2 million photos are posted each day. The average Korean user is 29, but executives say the U.S. average will be 10 years younger. About 200,000 Americans are beta-testing the site. Cyworld, founded in 1999, isn't merely gunning to be America's favorite online hub. It wants to be no less than a global networking powerhouse, said Michael Streefland, vice president of marketing for Cyworld's U.S. operations. "If we tried to create a Yankee-Doodle-and-NASCAR site, it would be a big mistake," said Streefland, who previously worked at BabyCenter.com, a networking site for pregnant women. "Our marching orders are to create a global site. The United States is so cross-cultural that if we can make it here we would have a scalable model that could be embraced in Europe and elsewhere." Proponents say global domination may not be a far-fetched idea. Cyworld keenly understands consumers in South Korea, where nearly three out of four homes have broadband Internet and technology giants like Microsoft and Motorola test products before launching them in the United States. If Cyworld can thrive in one of the most technologically advanced nations, why not elsewhere? Within six months of its launch, Cyworld China had more than 1.8 million members. "One of the most successful global brands is Samsung. They took a Korean conglomerate and built it into a huge marketing success," said Rohit Deshpande, a marketing professor at Harvard Business School. "Examples like this may be few and far between, but Cyworld could be at the start of this new wave of Asian companies that understand how to market on a global level."
By Rachel Konrad, Associated Press

Fox to Sell Films Online

Parent News Corp. will offer downloadable copies of movies and TV
shows on MySpace and other websites beginning in October. By Chris
Gaither.
http://email.latimes.com/cgi-bin1/DM/y/e6s...Io30G2B0HmZq0Es

Musician Is Front Man at Geffen

With Chairman Ron Fair, the label bucks an industry trend of
having business-world leaders and renews debate over which resume
is best. By Charles Duhigg.
http://email.latimes.com/cgi-bin1/DM/y/e6s...Io30G2B0HmZr0Et

Buzz in Books is Caffeine Related

NEW YORK-Starbucks' decision to sell titles has brewed cautious
anticipation in the publishing world. By Josh Getlin.
http://email.latimes.com/cgi-bin1/DM/y/e6s...Io30G2B0HmZu0Ew

PepsiCo Names Successor to CEO

Indra Nooyi is replacing Steve Reinemund at the maker of beverages
and snack foods. By Molly Selvin.
http://email.latimes.com/cgi-bin1/DM/y/e6x...Io30G2B0Hmob0EP

Spending by HMOs Is Ranked

California Medical Assn. finds Blue Cross spends the lowest
percentage of revenue on patients. By Lisa Girion.
http://email.latimes.com/cgi-bin1/DM/y/e6x...Io30G2B0Hmoc0EQ

The Action Again Is Overseas as Foreign Markets Bounce Back

After a gut-wrenching spring plunge, many foreign stock markets
have returned to a familiar pattern: They're sharply outpacing the
U.S. market. By Tom Petruno.
http://email.latimes.com/cgi-bin1/DM/y/e6x...Io30G2B0Hmod0ER

Price Gains in July Ease to 0.2%

The moderate increase in the consumer index supports other signs
that inflation is peaking. By Lisa Girion.
http://email.latimes.com/cgi-bin1/DM/y/e65...Io30G2B0HnCy0Ee

HP's Shares Soar on Results

The computer maker's stock hits a five-year high as its new CEO's
restructuring plan takes hold and its PC division performs
strongly. By Dawn C. Chmielewski.
http://email.latimes.com/cgi-bin1/DM/y/e65...Io30G2B0GpfQ0Ea

Good news triggers oil price fall BBC News
Oil prices have fallen to their lowest level in nearly two months as the continuing ceasefire in Lebanon and healthy US stockpiles calmed markets. Traders said BP's decision to continue oil production from parts of its Prudhoe Bay field in Alaska had also triggered the price movement. Brent crude was trading down $1.06 at $71.77 a barrel while US light, sweet crude slid $1.69 to $70.20. Despite the drop, prices are still 14% higher for the year as a whole.

Strong inventories
A series of positive developments in recent days have boosted sentiment, which had previously been hit by the conflict in Lebanon, kidnappings of foreign oil workers in Nigeria and BP's problems. The troubles had sent Brent prices to a record high above $78 a barrel. On Wednesday, the US energy department reported higher-than-expected oil inventories of 331 million barrels. Stockpiles fell by 1.6 million barrels in the week ending 11 August but the reduction was less than expected given the closure of part of Prudhoe Bay, the largest oil field in the US, due to pipe corrosion. Inventories remain at almost their highest level since 1999. "Some of the factors and disruptions that helped drive us to very high levels have been resolved now," said Eoin O'Callaghan, an energy analyst at BNP Paribas. Potential problems remain just under the surface, however, with ongoing violence in the oil-rich Niger Delta and Iran's discussions with the United Nations over its nuclear ambitions reaching a delicate stage. Iran, Opec's second largest oil producer, has said it will respond by 22 August to a package of incentives designed to persuade it to stop enriching uranium.

GE Fleet Services Launches Web-Based European Fleet Management Solution Monitordaily.com
GE Commercial Finance, Fleet Services (UK) has launched a new service that enables fleet managers to review key aspects of fleet performance online, including areas such as vehicle inventory and cost information or termination forecast. GE's "iManage" integrates information from 11 different countries in eight languages. In as little as two minutes, customers can now access management reports either consolidated across Europe or by country that GE says previously would have taken weeks to compile, the company said. iManage also provides the means to drill down into the detail of information presented in the dashboard, allowing managers to identify specific problems and take the appropriate actions. The time frame of the dashboard information can be changed to cover the last one, two or three years, and the user can set target costs and inventory numbers with upper and lower control limits to enable him or her to see if their fleet is operating efficiently. Different access priorities can be defined within the application for different types of user, so fleet managers, HR managers, purchasing managers and financial managers can all see information that meets the needs of their particular department. iManage can be accessed through any web browser with a user name and password security check. It was developed with the help of GE's Customer Advisory Board. GE Commercial Finance Fleet Services leases or operates more than 1.2 million vehicles worldwide with 250,000 cars located in continental Europe and the UK, where it has a fleet of 54,000 vehicles.

Twenty-four million pay for VoIP Silicon.com
Key to success? Don't call it VoIP! Twenty-four million people worldwide pay to use retail voice over IP (VoIP) services, new research has shown. The number of retail VoIP subscribers jumped more than 80 per cent to 18.7 million during 2005 - or 24 million if you add users of PC-to-phone services such as Skype, according to Point Topic's IP Telephony report. Based on reported revenues, the analyst estimates that one-sixth of VoIP subscribers used Skype in the fourth quarter of 2005. The Asia-Pacific region has the largest share of VoIP users but the fastest growth is seen in Europe and the US. The number of VoIP subscribers in Europe grew nearly threefold to 5.3 million during 2005 and is expected to pick up even more in 2006. France has the highest VoIP adoption in Europe with 2.8 million paying subscribers, led by new carriers Free and neuf selling easy-to-use VoIP services - though incumbent France Telecom's VoIP push has also proved fruitful as it raised subscriber levels more than fivefold in 2005. In the UK, BT's VoIP offering had "relatively few" subscribers by the end of 2005 but was picking up in early 2006, said the analyst. One key success in the US, according to Point Topic, is marketing the service not as 'VoIP' but describing it in simple terms customers understand such as 'digital telephone'.
By Sylvia Carr

Venture Capital: Too soon to call clean fuels a gold rush Seattle Post-Intelligencer
About 250 business leaders and politicians gathered at The Westin Hotel Thursday morning to discuss one of the hottest topics in economic development and venture capital: alternative energy. Based on the buzz in the room and the upbeat comments from the five panelists, we are on the cusp of a new gold rush in which technologies from the Puget Sound region could change the way people fuel their cars and heat their homes. "In the history of Seattle, there is really going to be three gold rushes, two of which have taken place, one which you are in the middle of," said Rep. Jay Inslee, D-Wash., a panelist and clean energy proponent who mentioned the impact that the Alaskan and Internet gold rushes had on Seattle. "The third will be Puget Sound becoming the epicenter of the new, clean, renewable energy industry in the world." While venture capitalists are tossing more dollars into clean technology projects and a handful of alternative energy companies have popped up in recent years, it might be premature to declare the Seattle area as ground zero for this movement. The Northwest ranked last among seven regions in terms of venture capital investments in clean tech, according to numbers presented Thursday by John Balbach, a senior adviser with the CleanTech Venture Network. In 2005, just $11 million flowed to these companies in the Northwest -- a pittance compared with the Northeast and Midwest. Investments have picked up this year, with about $60 million invested in the first two quarters, but the numbers are still far below hotbeds such as California. Seattle lawyer Todd Glass, co-chairman of Heller Ehrman's Energy Practice Group, walked away from Thursday's meeting thinking that Washington state has a lot to do if it wants to become a player in alternative energy. "We have been going along at 15 or 20 miles per hour, slowly ramping up," Glass said. "The problem is that California came later to the story, but they have gone from zero to 80." Still, many believe that Washington has the ingredients to make strides in this booming area. Inslee, a supporter of the New Apollo Energy Project, a tax-credit system designed to promote alternative energy, said that the state is "destined to be the leader" in clean energy because it has intellectual firepower and a deep understanding of environmental issues. "If you marry those two attributes of a community, it leads us to say that we are going to lead the world in this regard," he said. Some Seattle entrepreneurs are trying to do just that, including two who spoke Thursday. Imperium Renewables Chief Executive Martin Tobias, a former Microsoft manager who co-founded digital media company Loudeye, described his reasons for leaving the technology industry to help jump-start a biodiesel producer. Tobias said it is "pretty tricky" to make money in technology right now because most of the good ideas are taken. Alternative energy, on the other hand, is wide open. He noted that less than 1 percent of venture capital dollars went to energy companies between 1994 and 2004. He added that big oil spends a small percentage on research and development. Tobias, whose company broke ground on a 100 million- gallon biodiesel plant in Grays Harbor County earlier this week and plans to open facilities on the East Coast and in Argentina in the next two years, said the lack of interest by the big energy companies creates an opening. "You can grow an incredibly large company under the noses of these oil companies," said Tobias, adding that his company could reach $1 billion in revenue without attracting interest from oil giants. Cary Wasden, chief investment officer at Prometheus Energy, a Seattle company that converts landfill gas into liquid natural gas, cited another reason why it is a good time to enter the alternative energy arena. While venture capitalists didn't invest much in the sector over the past 10 years, Wasden said they are now. "There is a lot of money out there," said Wasden, whose company scored $20.2 million in equity financing earlier this summer. Inslee even mentioned a shift by venture capitalists into alternative energy, saying the minds that shaped the Internet age are now putting their brainpower to work in the sector. "It is very interesting to see this migration." In fact, investors are prowling the country for new ideas in solar, wind and biofuels. On Thursday, Renewable Energy Group, a Ralston, Iowa-based biodiesel producer, scored $100 million in venture capital financing. According to CleanTech, venture capitalists invested $843 million in clean energy companies during the second quarter -- a 129 percent increase over the same period last year. Alternative energy also now is the third-largest venture capital investment category, representing 13 percent of capital allocated. Those numbers make people such as Balbach take note. "It feels like 1995. There was a real sense around the Netscape IPO that something big was going to happen," he said. "The same dynamics and drivers are now going on with clean tech."

BLOG ROUNDUP: A quick look at some of the items appearing in my venture blog this week. Here is the link: blog.seattlepi.com/venture.

• Get in on a discussion about why more women aren't leading venture-backed companies.
• Read about Trailfire, a new Seattle Internet service that allows users to place personal notes on Web sites.

By JOHN COOK, P-I REPORTER

Auto Insurers Yield to Rate Regulations

SACRAMENTO-Top underwriters rush to file revisions of their rate